Target also said it expects fourth-quarter earnings to "meet or exceed" analyst expectations of $1.11 per share.

The chain has faced tough competition from larger rival Wal-Mart Stores Inc. as recession-batterred customers have turned away from its "cheap chic" styles and toward retailers they see as offering lower prices.

Sales in stores open at least a year rose 1.8 percent during the five weeks ended Jan. 2. Sales of commodities such as health and beauty and food were the strongest sellers. Electronics, shoes and toys also were strong.

Home decor, besides holiday decorations, was weaker.

Analysts polled by Thomson Reuters, on average, expected sales in stores open at least a year to fall 0.2 percent. The figure is considered a key measure of retailer performance because it measures growth at existing stores rather than from newly opened ones.

The Mid-Atlantic, the upper Midwest and and the Northeast were stronger regions, while the central U.S. and southern California were weaker.

Total sales rose 5 percent to $9.74 billion from $9.28 billion last year.

Year-to-date, sales in stores open at least one year fell 2.7 percent while total sales rose less than 1 percent to $59.15 billion.

Target expects January sales in stores open at least one year to be flat or rise slightly from last January.